By: Nelson, et al. S.B. No. 1693

Substitute the following for S.B. No. 1693:

By: KruseeC.S.S.B. No. 1693C.S.S.B. No. 1693 Krusee C.S.S.B. No. 1693

A BILL TO BE ENTITLED

AN ACT

relating to the creation of inland port authorities; providing authority to impose a tax and issue bonds.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The Business & Commerce Code is amended by adding Title 15 to read as follows: TITLE 15. CURRENCY AND TRADE SUBTITLE A. CURRENCY SUBTITLE B. PORT OF ENTRY AUTHORITIES CHAPTER 672. INLAND PORT AUTHORITIES SUBCHAPTER A. GENERAL PROVISIONS

Sec. 672.001. DEFINITIONS. In this chapter:

(1) "Authority" means an inland port authority created under this chapter.

(2) "Board" means the board of directors of an authority.

(3) "Bond" includes a bond, certificate, note, or other obligation.

(4) "Inland port" means an area with direct access to highway, rail, air transport, or intermodal facilities but located away from traditional land and coastal borders.

(5) "Participating entity" means a municipality or county described by Section 672.052.

Sec. 672.002. NATURE OF INLAND PORT AUTHORITY. An authority is a special district and a political subdivision of this state created under Section 59, Article XVI, Texas Constitution.

Sec. 672.003. FINDINGS OF BENEFIT AND PUBLIC PURPOSE. (a) An authority is created to serve a public use and benefit.

(b) All land and other property to be included in an authority will benefit from the works and projects to be provided by the authority under powers conferred by Sections 52 and 52-a, Article III, and Section 59, Article XVI, Texas Constitution, and other powers granted under this chapter.

(c) The creation of the authority is in the public interest and is essential to:

(1) further the public purposes of developing and diversifying the economy of the state;

(2) promote homeland security and protection;

(3) eliminate unemployment and underemployment; and

(4) develop or expand transportation and commerce.

(d) This chapter furthers the public purposes of developing and diversifying the economy of this state by encouraging the establishment of inland ports to facilitate commerce through:

(1) strategic investment in multi-modal transportation assets; and

(2) comprehensive planning, development, management, and operation of facilities and supporting infrastructure for:

(A) transportation;

(B) commercial processing; and

(C) domestic and international trade.

(e) The authority will not act as the agent or instrumentality of any private interest even though the authority will benefit many private interests as well as the public. [Sections 672.004-672.050 reserved for expansion] SUBCHAPTER B. CREATION OF AUTHORITY

Sec. 672.051. AREAS ELIGIBLE FOR CREATION OF AUTHORITY. (a) An authority may be created only in a contiguous area that:

(1) is located in not more than two adjacent counties;

(2) does not include property zoned for residential use that comprises more than five percent of the total taxable appraised value of real property in the authority's proposed boundaries; and

(3) includes:

(A) a municipally owned airport with a runway at least 4,900 feet in length;

(B) a portion of an interstate highway or a highway designated as a high priority trade corridor on the national highway system; and

(C) operating assets of at least one Class I railroad as classified by the federal Surface Transportation Board.

(b) The contiguous area may not include any property for which a participating entity has received written notice from the property owner that the property owner elects to have the property excluded from the authority. The notice must be received before the authority is created.

Sec. 672.052. ELIGIBILITY OF ENTITY TO CREATE AN AUTHORITY. A participating entity is eligible to create an authority if:

(1) the entity is wholly or partly located in the authority's proposed boundaries; or

(2) the entity is a municipality that has extraterritorial jurisdiction in the proposed boundaries of the authority.

Sec. 672.053. PROPOSAL TO CREATE. (a) An authority is proposed to be created when each participating entity:

(1) by order, ordinance, or resolution authorizes the authority's creation; and

(2) executes an agreement to create and govern the authority.

(b) The agreement creating the authority must:

(1) be approved as part of the order, ordinance, or resolution; and

(2) specify the authority's powers under this chapter.

(c) The specified powers may limit but may not expand the powers granted by this chapter.

Sec. 672.054. HEARINGS. (a) Not earlier than the 60th day or later than the 30th day before the date the governing body of a participating entity proposes to authorize creation of an authority under Section 672.053(a), the governing body must hold two hearings to consider the creation of the proposed authority.

(b) Not later than the seventh day before the date of each hearing, the participating entity must publish notice of the hearing in a newspaper of general circulation in the area of the proposed authority.

(c) The notice must state:

(1) the date, time, and place for the hearing;

(2) the boundaries of the proposed authority, including a map of the proposed authority;

(3) the powers of the proposed authority, including the power to impose assessments and ad valorem taxes; and

(4) that an owner of property wholly or partly in the proposed boundaries of the district may elect to exclude the property from the district by sending before the district's creation written notice to a participating entity in which the property is wholly or partly located.

(d) The required notice may be published, and the public hearings may be conducted, jointly by a municipality and a county in which the municipality is wholly or partly located.

Sec. 672.055. CREATION BY ORDER, ORDINANCE, OR RESOLUTION. (a) After all hearings, the governing bodies of the participating entities may by concurrent order, ordinance, or resolution and execution of the agreement under Section 672.053 create an authority.

(b) The agreement must:

(1) specify the number of authority directors and who appoints the directors;

(2) describe the authority's boundaries; and

(3) name the authority the "(insert name) Inland Port Authority." [Sections 672.056-672.100 reserved for expansion] SUBCHAPTER C. BOARD OF DIRECTORS; EMPLOYEES

Sec. 672.101. GOVERNING BODY. (a) The governing body of an authority is a board of directors with an odd number of directors agreed to by the participating entities when creating the authority. The board is composed of:

(1) three directors appointed by the most populous municipality in the authority;

(2) one director appointed by each county in the authority;

(3) one director appointed by each municipality in the authority that has not made an appointment under Subdivision (1);

(4) one director appointed by each school district that owns property in the authority; and

(5) any other directors appointed as provided in the agreement creating the authority under Section 672.053.

(b) The board shall manage, operate, and control the authority.

Sec. 672.102. TERMS. The participating entities shall appoint the directors to serve staggered four-year terms with as near as possible to one-half of the directors' terms expiring every two years.

Sec. 672.103. QUALIFICATIONS. (a) Except as provided by this subsection, a director must reside in the boundaries of the participating entity that appointed the director. A director appointed under Section 672.101(a)(5) must reside in the boundaries of at least one of the participating entities.

(b) A director may be an elected official or employee of a participating entity.

Sec. 672.104. MAJORITY VOTE; QUORUM. (a) Except as otherwise provided by the agreement under Section 672.053, the vote of a majority serving on the board is necessary for any action taken by the board.

(b) The board may not meet or take any action without a quorum.

(c) If a vacancy exists on a board, the majority of directors serving on the board is a quorum.

Sec. 672.105. OFFICERS. (a) The board shall elect a presiding officer and an assistant presiding officer.

(b) The assistant presiding officer presides in the absence of the presiding officer.

(c) The board may elect other officers it considers appropriate.

Sec. 672.106. COMPENSATION; EXPENSES. A director serves without compensation but is entitled to reimbursement for actual and necessary expenses.

Sec. 672.107. PROHIBITED CONDUCT FOR DIRECTORS AND EMPLOYEES. An authority director or employee may not:

(1) accept or solicit any gift, favor, or service:

(A) that might reasonably influence the director or employee in the discharge of an official duty; or

(B) that the director or employee knows or should know is being offered with the intent to influence the director's or employee's official conduct;

(2) accept other employment or engage in a business or professional activity that the director or employee might reasonably expect would require or induce the director or employee to disclose confidential information acquired by reason of the official position;

(3) make personal investments that could reasonably be expected to create a substantial conflict between the director's or employee's private interest and the interest of the authority;

(4) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised the director's or employee's official powers or performed the director's or employee's official duties in favor of another; or

(5) have a personal interest in an agreement executed by the authority.

Sec. 672.108. REMOVAL OF DIRECTOR. (a) It is a ground for removal of a director from the board if the director:

(1) did not have at the time of appointment the qualifications required by Section 672.103;

(2) at the time of appointment or at any time during the director's term, is ineligible under Section 672.103 or 672.107 to serve as a director;

(3) cannot discharge the director's duties for a substantial part of the term for which the director is appointed because of illness or disability; or

(4) is absent from more than half of the regularly scheduled board meetings that the director is eligible to attend during a calendar year.

(b) The validity of an action of the board is not affected by the fact that it is taken when a ground for removal of a director exists. [Sections 672.109-672.150 reserved for expansion] SUBCHAPTER D. POWERS AND DUTIES

Sec. 672.151. MUNICIPAL MANAGEMENT DISTRICT POWERS AND DUTIES. An authority has the powers and duties applicable to a municipal management district under Subchapter E, Chapter 375, Local Government Code.

Sec. 672.152. RULES. An authority may adopt rules to govern the operation of the authority, including rules relating to:

(1) its employees;

(2) its facilities;

(3) health, safety, and general welfare of persons and property; and

(4) any other necessary matter concerning its purposes.

Sec. 672.153. INLAND PORTS FACILITATION. An authority shall facilitate and process national and international trade through strategic investment in multi-modal transportation assets, logistics systems, security processes, customs facilities, and freight transfer equipment and by promoting value-added services as goods move through the supply chain and into national and international commerce.

Sec. 672.154. TRANSPORTATION PROJECTS; PUBLIC UTILITY FACILITIES. (a) In this section:

(1) "Cogeneration facility" means a facility that generates electricity and heat in a single thermodynamic process.

(2) "Inland port improvement or facility" means an improvement or facility necessary or convenient for the proper operation of an inland port and may include land and equipment that have development potential for industrial, distribution, and processing facilities that support the movement of goods in national and international commerce.

(3) "Intermodal hub" means a central location where cargo containers can be easily and quickly transferred between trucks, trains, and airplanes, including through the use of cranes, conveyors, side loaders, and other equipment for the automated or semi-automated movement of cargo.

(4) "Public utility facility" means:

(A) a water, wastewater, natural gas, or petroleum pipeline or associated equipment;

(B) an electric transmission or distribution line, a cogeneration facility, or associated equipment; or

(C) telecommunications information services, or cable television infrastructure or associated equipment, including fiber optic cable, conduit, and wireless communications facilities.

(5) "Spaceport" means a facility and related equipment for the development and deployment of commercial space activities, including suborbital space flights, space training programs, zero gravity flights, jet flight adventures, visitor centers and museums, and space camps.

(6) "Transportation project" means:

(A) a passenger or freight rail facility, including:

(i) railroad tracks;

(ii) a rail line;

(iii) switching, signaling, or other operating equipment;

(iv) a depot or other facility for receiving;

(v) a locomotive;

(vi) rolling stock;

(vii) cranes, conveyors, and other equipment for movement of freight, including containers;

(viii) security facilities for scanning, screening, and inspection of freight, trucks, railcars, and other means of containerized transport of freight;

(ix) a maintenance facility; and

(x) other real and personal property associated with a rail operation;

(B) a roadway;

(C) an airport and facilities supporting and used in airport operations, including aircraft, runways, runway expansions or extensions, terminals, and air traffic control facilities;

(D) a spaceport;

(E) an intermodal hub;

(F) an automated conveyor belt for the movement of freight;

(G) a border crossing inspection station; or

(H) an inland port facility or improvement.

(b) An authority may acquire a transportation project or public utility facility, acquire property for a transportation project or public utility facility, and construct or improve a transportation project or public utility facility inside or, if contiguous to a project or facility inside the authority, outside the authority as necessary to ensure an adequate transportation or public utility infrastructure to support authority facilities or operations provided that in no instance may the authority acquire property through eminent domain.

(c) An authority may finance a transportation project or public utility facility or construction, acquisition, or improvement of a transportation project or public utility facility from money available to the authority under this chapter.

Sec. 672.155. OWNERSHIP OF AUTHORITY PROJECTS. (a) A transportation project that is the subject of a development agreement with a private entity, including the facilities acquired or constructed on the project, is public property and belongs to the authority that entered into the agreement.

(b) An authority may enter into an agreement that provides for the lease of rights-of-way, the granting of easements, the issuance of franchises, concessions, licenses, or permits, or any lawful uses to enable a private entity to construct, occupy, operate, and maintain a transportation project, including supplemental facilities. At the termination of the agreement, the transportation project, including the facilities, must be in a state of proper maintenance as determined by the authority and returned to the authority in satisfactory condition at no further cost.

Sec. 672.156. PROPERTY GENERALLY. An authority may acquire, construct, complete, develop, finance, own, operate, maintain, lease, and sell any kind of property to any person for any authority purpose, including transportation projects, office buildings, warehouses, passenger and freight terminals, container examination stations, and any other facility necessary or useful to fulfilling the purposes of the authority.

Sec. 672.157. PURCHASE OF REAL PROPERTY. An authority may purchase an interest in real property to acquire, construct, or operate an authority facility on terms and at a price agreed to between the authority and the owner.

Sec. 672.158. CONVEYANCE OF PROPERTY. (a) The governing body of a municipality, county, or other governmental entity may convey title or rights and easements to any property needed by the authority to effect its purposes. The authority and the entity may agree on any terms to make the conveyance.

(b) To the extent of a conflict between this section and any other law, this section controls.

Sec. 672.159. CONSENT REQUIRED FOR CERTAIN PROPERTY ACQUISITION. The authority may not acquire real property listed on the tax rolls of a participating entity without the consent of the participating entity.

Sec. 672.160. NO EMINENT DOMAIN POWER. An authority may not exercise the power of eminent domain.

Sec. 672.161. TRANSPORTATION PROJECT; CONSTRUCTION MANAGER-AT-RISK. (a) An authority may contract for the design and construction of a transportation project under Section 672.154 by a construction manager-at-risk procedure under which the construction manager-at-risk provides consultation to the authority during the design of the transportation project and is responsible for construction of the transportation project in accordance with the authority's specifications.

(b) In using a construction manager-at-risk procedure, the authority shall follow the procedures provided by:

(1) Subchapter F, Chapter 2264, Government Code, if House Bill 447, Acts of the 80th Legislature, Regular Session, 2007, takes effect; or

(2) Section 271.118, Local Government Code, if House Bill 447, Acts of the 80th Legislature, Regular Session, 2007, does not take effect.

Sec. 672.162. TRANSPORTATION PROJECT; DESIGN-BUILD. (a) An authority may contract for the design and construction of a transportation project under Section 672.154 using a design-build procedure in which services for the design and construction of the project are provided under a single contract.

(b) In using a design-build procedure, the authority shall follow the procedures provided by:

(1) Subchapter J, Chapter 271, Local Government Code, if House Bill 1886, Acts of the 80th Legislature, Regular Session, 2007, takes effect;

(2) Section 271.119, Local Government Code, if:

(A) House Bill 1886, Acts of the 80th Legislature, Regular Session, 2007, does not take effect; and

(B) House Bill 447, Acts of the 80th Legislature, Regular Session, 2007, does not take effect; or

(3) Subchapter G, Chapter 2264, Government Code, if:

(A) House Bill 1886, Acts of the 80th Legislature, Regular Session, 2007, does not take effect; and

(B) House Bill 447, Acts of the 80th Legislature, Regular Session, 2007, takes effect.

(c) If Subchapter J, Chapter 271, Local Government Code, applies, it applies without regard to the size or population of the authority.

Sec. 672.163. LEASES. An authority may lease the use of any of its facilities or equipment. A lease term may not exceed 50 years.

Sec. 672.164. AGREEMENTS GENERALLY. An authority may enter into an agreement with any person, including with the United States or any other governmental entity, for any authority purpose.

Sec. 672.165. AMENDMENT OF GOVERNING AGREEMENT. (a) The participating entities may amend the agreement executed under Section 672.053. The amendment may limit or expand the authority's powers, but may not expand the authority's powers beyond the powers granted by this chapter.

(b) The agreement may not be amended if the authority has outstanding indebtedness and the amendment:

(1) reduces the authority's powers; or

(2) negatively affects the holders of debt issued by the authority.

Sec. 672.166. JOINT ACTIONS. An authority may act jointly with any other person, private or public, inside or outside this state or the United States, in the performance of any power or duty under this chapter or other law.

Sec. 672.167. INSURANCE. (a) An authority may purchase and pay premiums to insurers for insurance of any type in amounts considered necessary or advisable by the board.

(b) An authority may purchase an additional insured provision to any liability insurance contract.

Sec. 672.168. PROMOTION AND ADVERTISING. An authority may promote the use of an authority project, facility, or service, including a project, facility, or service that it operates on behalf of another entity or that another entity operates on behalf of the authority, by appropriate means, including advertising or marketing as the authority determines appropriate.

Sec. 672.169. SECURITY SERVICES. An authority may employ a security officer who holds a peace officer license issued by the Commission on Law Enforcement Officer Standards and Education.

Sec. 672.170. GRANTS; LOANS; DONATIONS. An authority may accept a grant, loan, or donation from any person, including the United States, this state, or a political subdivision of this state.

Sec. 672.171. VENUE. An action against the authority must be brought in the county in which the seat of the most populous municipality that is a participating entity is located. If a municipality is not a participating entity, an action must be brought in the county in which the principal office of the authority is located.

Sec. 672.172. COMPLIANCE WITH MUNICIPAL REQUIREMENTS. All authority property and any improvement project, transportation project, or public utility facility constructed for the authority is subject to the land use regulations and other applicable ordinances or rules of each municipality in whose corporate boundaries or extraterritorial jurisdiction the property, project, or facility is located.

Sec. 672.173. CONSENT REQUIRED FOR CERTAIN POWERS. With the consent of a municipality, county, or other political subdivision, an authority may:

(1) use streets, alleys, roads, highways, and other public ways of the municipality, county, or other political subdivision; and

(2) relocate, raise, reroute, change the grade of, or alter, at the expense of the authority, the construction of:

(A) a street, alley, highway, road, or railroad;

(B) electric lines and facilities;

(C) telegraph and telephone properties and facilities;

(D) pipelines and facilities;

(E) conduits and facilities; and

(F) other property, as necessary or useful in the construction, reconstruction, repair, maintenance, and operation of facilities.

Sec. 672.174. CONSENT OF TEXAS DEPARTMENT OF TRANSPORTATION REQUIRED FOR HIGHWAY WORK. An authority may not alter a highway that is part of the state highway system without the consent of the Texas Department of Transportation.

Sec. 672.175. CONSENT OF RAILROAD REQUIRED. An authority may not alter a railroad without consent of the railroad.

Sec. 672.176. NO RETAIL UTILITY SERVICES. An authority may not provide retail utility services.

Sec. 672.177. NO DUPLICATION OF SERVICES OR FACILITY OF PUBLIC ENTITY. An authority may not duplicate a service or facility of another public entity. [Sections 672.178-672.200 reserved for expansion] SUBCHAPTER E. GENERAL FINANCIAL PROVISIONS

Sec. 672.201. RATES. An authority shall establish and maintain commercially reasonable and nondiscriminatory rates, rentals, fees, charges, or other compensation for the use of facilities constructed, operated, regulated, or maintained by the authority.

Sec. 672.202. REIMBURSEMENT TO AND PURCHASES FROM PRIVATE ENTITIES. (a) An authority may reimburse a private entity for money spent to improve facilities, including a facility described by Section 672.154, or other property in the authority if the improvement will provide a public benefit or has been or will be dedicated or otherwise transferred to public use.

(b) An authority may purchase any improvement to property that has been or will be constructed by a private entity, regardless of whether the construction occurs before or after the creation of the authority.

Sec. 672.203. LIABILITIES. An authority may incur liabilities, borrow money on terms the board determines, enter into short-term borrowing and commercial paper transactions, and issue bonds.

Sec. 672.204. CREDIT AGREEMENTS. An authority may enter into credit agreements under Chapter 1371, Government Code.

Sec. 672.205. PROCUREMENT. (a) An authority shall adopt rules governing the award of contracts through competitive processes for goods and services.

(b) An authority may procure goods and services, including materials, engineering, design, construction, operations, maintenance, and other goods and services, through any procedure authorized by this chapter or any other law. Chapter 2254, Government Code, applies to the procurement of professional services.

(c) To the extent of a conflict between this section and any other law, this section controls.

Sec. 672.206. DEPOSITORY OR TREASURER. (a) The board by resolution shall designate a bank or banks as the authority's depository.

(b) All authority money must be secured in the manner provided for securing county funds. [Sections 672.207-672.250 reserved for expansion] SUBCHAPTER F. ASSESSMENTS AND IMPACT FEES

Sec. 672.251. GENERAL POWERS RELATING TO ASSESSMENTS AND IMPACT FEES. An authority may impose assessments and impact fees under Subchapters F, G, and H, Chapter 375, Local Government Code.

Sec. 672.252. ADDITIONAL ASSESSMENT POWERS. In addition to the powers granted under Subchapter F, Chapter 375, Local Government Code, an improvement project undertaken by an authority may include:

(1) the financing of any of the improvements described in Section 375.112, Local Government Code; and

(2) the construction, financing, acquisition, improvement, relocation, operation, maintenance, or provision of an inland port facility or transportation project under Subchapter D. [Sections 672.253-672.300 reserved for expansion] SUBCHAPTER G. AD VALOREM TAXES AND BONDS

Sec. 672.301. GENERAL BOND AUTHORITY. (a) Except as otherwise provided by this subchapter, an authority may issue bonds as provided by Subchapter J, Chapter 375, Local Government Code.

(b) Sections 375.207 and 375.208, Local Government Code, do not apply to an authority.

Sec. 672.302. TAX AND BOND ELECTION. (a) The authority may not issue bonds secured by ad valorem taxes unless the issuance of the bonds and the tax to pay the bonds are approved by authority voters at an election held for that purpose.

(b) The authority may issue bonds not secured by ad valorem taxes without an election.

(c) The proposition submitted in the election must state:

(1) the purpose for which the bonds are to be issued;

(2) the amount of the bonds;

(3) the anticipated interest rate, which may be stated as a range;

(4) the ad valorem taxes that will be imposed to pay the annual interest on the bonds; and

(5) the maturity date of the bonds or that the bonds may be issued to mature serially over a specified number of years not to exceed 40.

(d) In addition to the notice required by Section 4.003(c), Election Code, the authority shall provide notice of the election by:

(1) posting a substantial copy of the election order at:

(A) three public places in the authority, which may include the place for posting of official notices maintained by one or more of the participating entities; and

(B) the authority's principal office; and

(2) publishing notice of the election in a newspaper of general circulation published in the authority.

(e) The notice required by Subsection (d)(2) must be published on the same day in each of two successive weeks. The first publication must be not less than 14 days before the date of the election.

(f) At the election, the ballots shall be printed to permit voting for or against the proposition: "The issuance of bonds and the imposition of taxes to pay the bonds."

Sec. 672.303. AD VALOREM TAX AUTHORIZED; RATE. (a) The authority may impose an ad valorem tax for any authority purpose if a majority of the authority voters voting at an election called for that purpose vote in favor of the tax.

(b) The authority's tax rate may not exceed 10 cents on each $100 valuation of all taxable property in the authority.

(c) The authority shall publish notice and hold a hearing on the tax rate in the same manner as provided by Section 672.054.

(d) After setting the tax rate, the authority is governed by the provisions of the Tax Code governing ad valorem taxes of home-rule municipalities.

(e) The initial tax rate does not take effect until the tax year beginning on a date after the date of the initial meeting of the board or the tax year following the date the board sets the initial tax rate, whichever is later.

Sec. 672.304. CERTIFICATES OF OBLIGATION. An authority may issue certificates of obligation in the manner provided by Subchapter C, Chapter 271, Local Government Code.

Sec. 672.305. NO MUNICIPAL OR COUNTY OBLIGATION. Except as provided by Section 672.402, a participating entity is not obligated to pay any authority bonds.

Sec. 672.306. BONDS EXEMPT FROM TAXATION. Bonds issued under this chapter, the transfer of the bonds, and income from the bonds, including profits made on the sale of the bonds, are exempt from taxation in this state.

Sec. 672.307. APPLICATION OF OTHER LAW. Subchapter H, Chapter 375, Local Government Code applies to a tax imposed by an authority. Chapter 2007, Government Code, does not apply to a tax imposed by an authority. [Sections 672.308-672.400 reserved for expansion] SUBCHAPTER H. WITHDRAWAL AND DISSOLUTION

Sec. 672.401. WITHDRAWAL. (a) A participating entity may withdraw from the authority if:

(1) the governing body of each participating entity agrees to the withdrawal; and

(2) the authority has outstanding bonded indebtedness, but the debt holders agree in writing to the withdrawal.

(b) If a participating entity withdraws from the authority, the boundaries of the authority are revised to reflect the removal of the territory of the withdrawing entity.

(c) If an entity that appoints directors under Section 672.101 withdraws, the directors that were appointed by that entity vacate the director's office. The participating entities shall appoint a new director to fill the remainder of each withdrawing director's term. The new director is appointed as provided by Section 672.101.

Sec. 672.402. DISSOLUTION. An authority is dissolved if:

(1) the governing body of each participating entity agrees;

(2) all debts and other liabilities of the authority have been paid and discharged or adequate provision has been made for the payment of all debts and other liabilities;

(3) there are no suits pending against the authority, or adequate provision has been made for the satisfaction of any judgment, order, or decree that may be entered against it in any pending suit; and

(4) the authority has commitments from other governmental entities to assume jurisdiction of all authority property, including facilities and equipment.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.